Commercial Business

‘Unintentional Errors’ Result in Higher Tariffs on Some OTR Tires

The U.S. Department of Commerce (DOC) has reversed course in one of its tire tariff investigations after discovering its previous calculations were incomplete. The result is now all but one off-the-road (OTR) tire manufacturer will pay an anti-dumping tariff on OTR tires made in India.

Balkrishna Industries Ltd. (BKT) is the only OTR tire maker in India excluded from the anti-dumping tariff. The DOC maintains there’s no evidence BKT dumped tires at a less-than-fair-market value in the U.S.

The change in calculations stems from documentation provided by Alliance Tires Pvt. Ltd. The result is Alliance will pay 3.67% tariff, and all other OTR tire makers also will pay 3.67%. Previously, the DOC said there was no need for an anti-dumping tariff because there was no evidence OTR tire manufacturers in India had dumped tires in the U.S.

The anti-dumping tariff is assessed on top of the countervailing tariff on OTR tires in India. (Countervailing tariffs are imposed to offset government subsidies the U.S. says foreign governments have provided manufacturers to produce and export their products.) Alliance will pay a 4.9% countervailing tariff, while BKT will pay a 5.36% rate. All other OTR tire makers in India will pay a 5.06% countervailing duty.

The details

What caused this change is in the details. Throughout its year-long investigation of OTR tires the DOC analyzed data provided by Alliance and BKT. After setting the final tariff rates Jan.4, 2017, the petitioners, the United Steelworkers, pointed to what it alleged were miscalculations in the formula used by the DOC to not assess Alliance any dumping tariff.

Ultimately, the DOC reviewed the paperwork and discovered three errors, two by the DOC, and one by Alliance. The DOC called these mistakes “unintentional errors,” and said it had authority to revise its final decision. And in this case, the updated calculations showed a dumping tariff was needed for Alliance.

And because Alliance’s data was used to set the tariff rate for all other non-named OTR tire makers in India (basically, everyone but BKT), the rate for other manufacturers needed to increase from zero to 3.67% as well.

All around the world the professional retreading of tires is considered to be an important aspect of our industry, especially when it comes to the commercial vehicle sector, and Europe is certainly no exception.